SoftBank-backed Cohesity acquires Veritas' data security division, establish a $7B company

In a deal valued at $7 billion, U.S. data security software company Cohesity informed reporters on Wednesday that it had reached an agreement to purchase Veritas' data protection division.

According to Cohesity CEO Sanjay Poonen, the company, which has $1.6 billion in annual revenue combined, believes the cash and stock acquisition is likely to help the Japan-backed company, which is hoping to generate positive growth margins and expand into international markets.

Sanjay said that they've got the fastest growth on their side and Veritas had the best profitably on their side, combined together to be a profitable growth machine that's innovating with AI.

This deal is being announced at the same time that sources indicate Cohesity's largest rival, Rubrik, is preparing to go public in the next few weeks.

Situated in San Jose, California, the software developed by Cohesity uses artificial intelligence, to assist enterprises in managing and safeguarding their data from online dangers. Along with Big Tech, it is collaborating on the use of generative AI for massive data retrieval and search.

In order to help finance the deal, it raised roughly $1 billion in equity and $2 billion in debt from investors such as Haveli Investments, Premji Invest, and Madrona, according to people familiar with the situation.

One of the anonymous sources put the company's valuation at over $3 billion, including debt, following Cohesity's acquisition of the Veritas division.

Carlyle Group, a private equity group, purchased Veritas from Symantec in 2016 and now owns the majority of the company. Carlyle will be joining the board of the combined firm after rolling over its investment in the unit. Greg Hughes, CEO of Veritas, will also be added to the board.